MEDALLION KITCHENS, INC., PETITIONER V. NATIONAL LABOR RELATIONS
BOARD
No. 86-1327
In the Supreme Court of the United States
October Term, 1986
On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Eighth Circuit
Brief for the National Labor Relations Board in Opposition
TABLE OF CONTENTS
Questions presented
Opinions below
Jurisdiction
Statement
Argument
Conclusion
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. A1-A14) is reported
at 806 F.2d 185. The decision and order of the National Labor
Relations Board (Pet. App. A14-A26), including the decision of the
administrative law judge (Pet. App. A26-A45), are reported at 275
N.L.R.B. 58.
JURISDICTION
The judgment of the court of appeals (Pet. App. A46) was entered on
November 26, 1986. The petition for a writ of certiorari was filed on
January 17, 1987. The jurisdiction of this Court is invoked under 28
U.S.C. 1254(1).
QUESTIONS PRESENTED
1. Whether the National Labor Relations Board properly concluded
that economic strikers who have made an unconditional offer to return
to work must be reinstated in preference to temporary strike
replacements who are in layoff status at the time the unconditional
offer is made.
2. Whether, in the circumstances of this case, petitioner had fair
notice of the General Counsel's theory of unfair labor practice
liability and was afforded a full opportunity to develop its
affirmative defense to that theory.
STATEMENT
1. Petitioner Medallion Kitchens, Inc., is a Minnesota corporation
located in Fergus Falls, Minnesota, where it is engaged in the
manufacture and non-retail sale and distribution of kitchen and
bathroom cabinets. In 1983, petitioner's 279 plant production and
maintenance employees were represented by Local 1267 of the United
Automobile Workers Union. A collective bargaining agreement between
petitioner and the Union expired on September 19, 1983. No new
agreement was reached, and almost all of the bargaining unit employees
went out on strike. Petitioner continued to operate with a full
complement of approximately 250 employees, consisting of the few
employees who never went on strike and others who went on strike but
returned shortly thereafter (collectively referred to as
"non-strikers"), plus strike replacements hired after the strike
began. The replacements were told that a strike was in progress and
that their employment would last only for the duration of the strike.
Pet. App. A2-A3, A27-A32.
On December 10, 1983, a fire destroyed the plant's main building.
Production ceased, and all but about 20 to 30 employees were laid off.
/1/ Through telephone calls, at a meeting at the plant on December
15, and at a Christmas party on December 17, Etitioner assured the
idled employees that it was making every effort to reopen the plant
and to put everyone back to work as soon as possible. The employees
were asked to leave their current phone numbers with petitioner, and
to be ready to return to work when contacted. Pet. App. A3, A28, A3l.
On December 19, the union, on behalf of all strikers, made an
unconditional offer to return to work on December 26, and the
following day almost all of the strikers made individual requests for
reinstatement. Beginning in early January, and thereafter as
production resumed, petitioner recalled laid-off non-strikers and
replacements, but it did not reinstate any former strikers. Pet. App.
A4, A28-A29.
2.a. The Board issued a complaint alleging that petitioner had
violated Section 8(a)(1) and (3) of the National Labor Relations Act,
29 U.S.C. 158(a)(1) and (3), by failing to reinstate the striking
employees. /2/ In his opening statement at a hearing before an
administrative law judge (ALJ), petitioner's counsel indicated that
petitioner would rely on the rule, adopted in NLRB v. Mackay Radio &
Telegraph Co., 304 U.S. 333 (1938), that an employer is entitled to
hire and retain permanent replacements for economic strikers (Pet.
App. A30-A31). The General Counsel did not dispute that general
proposition, but the General Counsel's first witness was petitioner's
personnel director, Richard McGrady, who testified that the strike
replacements had been hired on a temporary basis -- in his words,
"until the strike was over" -- and that the replacements had been
expressly so informed (id. at A34-A35). /3/ Petitioner's counsel did
not object to the questions or to the testimony (id. at A35). /4/
b. In its post-hearing brief to the ALJ, petitioner argued that by
mid-November the strike replacements had become permanent employees,
that they had been so advised by McGrady before and after the fire,
and that, as permanent employees, they were entitled to be recalled
after the fire ahead of strikers seeking reinstatement (Pet. App.
A33). The General Counsel argued that the strike replacements were
only temporary employees who had no right to be recalled ahead of
unreinstated strikers. /5/ Petitioner moved to strike the General
Counsel's brief to the extent that it relied on evidence showing that
the replacement employees had been hired on a temporary basis, on the
ground that petitioner had been misled into assuming that the
permanent status of the replacements was not in issue (id. at A33).
In the alternative, petitioner moved to reopen the hearing to present
additional evidence on this matter (id. at A33-A34).
The ALJ denied petitioner's motion (Pet. App. A34-A36). The ALJ
found that the opening statement and the arguments advanced by
petitioner's counsel showed that petitioner knew that permanence was
an essential element of its defense (id. at A34-A35). In addition,
the ALJ found that the General Counsel's questioning of petitioner's
personnel director had placed the question of permanence in issue (id.
at A35). The ALJ concluded that the evidence as to the status of the
strike replacements was "certainly relevant, was not improperly
received in this case, * * * did not raise a new issue, * * * did not
give rise to a new issue of newly discovered evidence, and * * *
certainly was not a surprise to (petitioner)" (id. at A36).
The ALJ ruled that the employment of permanent replacements is an
affirmative defense to a charge of an unlawful failure to reinstate
economic strikers and that the burden of proving this justification
rests on the employer (Pet. App. A36). Relying on the record
evidence, the ALJ found that petitioner had failed to carry its burden
of proof on this defense, which was the only justification petitioner
asserted for its failure to reinstate the former strikers (id. at
A36-A37). /6/
3. The Board adopted the findings and conclusions of the ALJ (Pet.
App. A15). /7/
4. The court of appeals upheld the Board's decision and enforced
its order (Pet. App. A1-A14). The court rejected petitioner's
argument that it was denied due process because it had not been
notified that the permanent status of the replacement employees was in
issue (id. at A8). The General Counsel's theory, the court explained,
was that petitioner committed an unfair labor practice by refusing to
recall the striking employees, and that theory did not change during
the proceedings (ibid). The General Counsel was not required to
allege that the replacement employees were not promised permanent
employment, the court held, because petitioner had the burden of proof
on that affirmative defense to establish that the replacements were
permanent employees (ibid.).
The court also upheld the Board's finding that the replacements
were temporary as supported by substantial evidence (Pet. App.
A8-A14). The court further rejected petitioner's contention that the
ALJ did not adequately consider whether petitioner had displayed an
intention to treat the replacements as permanent (id. at A9-A11).
ARGUMENT
The court of appeals applied well settled law to the particular
facts of this case. That court's decision is correct, does not
conflict with any decision of this Court or of any other court of
appeals, and presents no significant legal question. Accordingly,
review by this Court is not warranted.
1. Petitioner asserts (Pet. 10-15) that this case presents the
question whether the permanent replacement of economic strikers is the
only legitimate and substantial business justification for refusing to
reinstate economic strikers. In actuality, petitioner is simply
quarreling with a finding of fact.
It is well settled that an employer who unjustifiably refuses to
reinstate economic strikers after the conclusion of a strike commits
an unfair labor practice, since the effect of the employer's action is
to discourage employees from exercising their statutory rights to
organize and to strike. NLRB v. Fleetwood Trailer Co., 389 U.S. 375,
378 (1967). However, during a strike the employer may hire
replacements, in order to obtain the necessary labor force to maintain
operations, and if the replacements have been hired on a permanent
basis the employer may retain them in preference to striking employees
who later offer to return to work. Ibid; NLRB v. Mackay Radio &
Telegraph Co., 304 U.S. 333, 345-346 (1938); Laidlaw Corp. v. NLRB,
414 F.2d 99, 105 (7th Cir. 1969), cert. denied, 397 U.S. 920 (1970).
The employer has the burden of proving that the replacements have
in fact been hired on a permanent basis. NLRB v. Fleetwood Trailer
Co., 389 U.S. at 378. The Board and the courts of appeals have
consistently held that the hiring of strike replacements is a
justification for refusing to reinstate striking employees only if the
replacements were informed, at the time they were hired or before the
striking employees unconditionally offered to return to work, that
they have received their jobs on a permanent basis. See, e.g.,
Randall, Division of Textron, Inc. v. NLRB, 687 F.2d 1240, 1248 (8th
Cir. 1982), cert. denied, 461 U.S. 914 (1983); Associated Grocers,
253 N.L.R.0. 31, 32 (1980), enforced sub nom. Transport & Local
Delivery Drivers, Local 104 v. NLRB, 672 F.2d 897 (D.C. Cir. 1981)
(Table), cert. denied, 459 U.S. 825 (1982); NLRB v. Mars Sales &
Equipment Co., 626 F.2d 567, 573 (7th Cir. 1980); NLRB v. Murray
Products, Inc., 584 F.2d 934, 939 (9th Cir. 1978).
The decision below is fully consistent with the foregoing
principles. Petitioner argued before the ALJ that, before the
strikers offered to return to work, the strike replacements had been
informed that they would be permanent employees, but the ALJ made a
factual finding that the strike replacements were only temporary (Pet.
App. A32-A37), and the Board and the court of appeals upheld the ALJ'S
finding. Accordingly, the Board and court of appeals determined that
petitioner failed to establish a "legitimate and substantial business
justification()" for refusing to reinstate the striking employees
(NLRB v. Fleetwood Trailer Co., 389 U.S. at 378 (citation omitted)).
Pet. App. A8-A11, A15.
Petitioner now argues that permanent replacement is not the only
"legitimate and substantial" business justification for refusing to
reinstate economic strikers. Although petitioner is correct in
principle, /8/ that principle does not aid him in this case. The only
two justifications offered by petitioner -- that it made "commitments"
to the temporary replacements to insure adequate staffing for the
clean-up and resumption of production, and that it is entitled to
honor those commitments (Pet. 14) -- simply restate its claim that the
replacements were guaranteed permanent employment. That claim was
rejected as a factual matter by the Board and the court of appeals,
/9/ and it does not warrant further review. This case therefore does
not present an occasion to determine what other types of business
justifications are "legitimate and substantial."
2. Petitioner also contends (Pet. 15-21) that the court of appeals
erred in enforcing a Board order based on a legal theory not alleged
in the Board's complaint. That claim, which turns on the
circumstances of this case, does not warrant further review. In any
event, the decision below was correct.
The complaint stated the General Counsel's theory, which was that
petitioner had violated the Act by recalling replacements rather than
striking employees. Since hiring permanent employees is an
affirmative defense on which the employer bears the burden of proof
(see NLRB v. International Van Lines, 409 U.S. 48, 54 (1972)
(Blackmun, J., concurring in the judgment); NLRB v. Fleetwood Trailer
Co., 389 U.S. at 378), the General Counsel's allegation put petitioner
on notice that it was obligated to prove that the replacements were
permanent. Due process does not require more. A court is not barred
from enforcing a finding by the Board of an unfair labor practice so
long as the respondent was aware of the charge during the hearing and
had a full and fair opportunity to litigate the matter. See, e.g.,
NLRB v. Mackay Radio & Telegraph Co., 304 U.S. at 349-350; NLRB v.
International Association of Bridge Workers Local 433, 600 F.2d 770,
775 (9th Cir. 1979), cert. denied, 445 U.S. 915 (1980); NLRB v.
Sunnyland Packing Co., 557 F.2d 1157, 1161 (5th Cir. 1977).
Moreover, regardless of what petitioner's attorney may have assumed
from the complaint, the testimony of the General Counsel's first
witness (who was petitioner's personnel director) showed that the
status of the replacements was in issue (see page 3, supra).
Accordingly, the Board correctly found that petitioner was aware of
the need to prove that the replacements were permanent and that
petitioner had a full and fair opportunity to offer his proof on that
issue (Pet. App. A34-A36). Petitioner's failure to do so was its own
fault, not the General Counsel's.
Petitioner erroneously asserts (Pet. 17) that the decision below
conflicts with decisions from other circuits. None of the decisions
cited by petitioner holds that the General Counsel must state in her
complaint that the employees hired to replace economic strikers were
temporary and not permanent. The only decision cited by petitioner
similar to this case is Presto Casting Co. v. NLRB, 708 F.2d 495 (9th
Cir.), cert. denied, 464 U.S. 994 (1982), but that case is factually
distinguishable. There, the court refused to enforce the Board's
order insofar as it held that the employer unlawfully refused to
reinstate employees who had engaged in an economic strike. The court
explained that, on the facts of that case, the employer did not have
an opportunity to litigate the permanence issue fairly. Id. at 498.
By contrast, in this case the court of appeals concluded that
petitioner was aware of this issue and had a full and fair opportunity
to litigate it. The remaining cases cited by petitioner hold only
that a complaint must sufficiently inform the respondent of the
alleged violation of the Act to enable the respondent to mount a
defense. /10/ The court below agreed with that proposition (Pet. App.
A6), and its application of that rule to the particular facts of this
case does not warrant review by this Court.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
CHARLES FRIED
Solicitor General
ROSEMARY M. COLLYER
General Counsel
JOHN E. HIGGINS, JR.
Deputy General Counsel
ROBERT E. ALLEN
Associate General Counsel
NORTON J. COME
Deputy Associate General Counsel
LINDA SHER
Assistant General Counsel
CARMEL P. EBB
Attorney National Labor Relations Board
APRIL 1987
/1/ Some of the employees who continued to work after the fire were
non-strikers; others were strike replacements (Tr. 41, 42).
/2/ The pertinent portions of the complaint are reprinted in the
court of appeals' opinion at Pet. App. A5.
/3/ Under questioning by the General Counsel, petitioner's
personnel director testified as follows (Pet. App. A31-A32):
Q. When you first began interviewing replacement employees, did you
interview most of those people?
A. Yes, sir.
Q. Do you recall hiring Marty Beckman?
A. I remember Marty Beckman. I believe he was hired at the Holiday
Inn, but I'm not sure.
* * * * *
Q. Did you tell Mr. Beckman how long he would be working?
A. No, sir. At that time we didn't know. I told him it might be a
week, it might be less and it might be more.
Q. Is that essentially what you told everybody who got hired?
A. Yes, sir.
Q. That it might be a week, it might be less, it might be a little
more?
A. They could work up until the strike was over.
Q. Until the strike was over?
A. Or the people come back.
/4/ When McGrady was later recalled as petitioner's witness, he
testified as to post-fire assurances to idled employees that the plant
would be reopened (Pet. App. A11, A33). His earlier testimony that
replacements had been hired only for the duration of the strike,
however, was "essentially uncontroverted" (id. at A11).
/5/ In the alternative, the General Counsel argued that the
replacements, even if permanent employees, could not be recalled
before more senior former strikers, because the replacements had been
displaced for some weeks as the result of the fire. See Giddings &
Lewis, 255 N.L.R.B. 742 (1981), enforcement denied, 675 F.2d 926 (7th
Cir. 1982). The ALJ did not pass on this alternative contention, and
the Board also found it unnecessary to do so. (Pet. App. A15 n.2).
/6/ The ALJ found that the strike replacements had been hired as
temporary replacements. The ALJ also found no evidence that the
replacements were ever told that they had become permanent employees.
Pet. App. A33.
/7/ The Board did not address the argument in the petition, which
petitioner did not make to the ALJ, that, absent evidence of an
anti-union animus, commitments to strike replacements that fall short
of offers of permanent employment may nevertheless constitute a
sufficient business justification for preferring replacements to
strikers. See Pet. App. A14-A24.
/8/ For example, the absence of vacancies resulting from bona fide
decreases in the required work force, whether or not strike-related,
is one other such justification. See NLRB v. Fleetwood Trailer Co.,
389 U.S. at 379 (noting that the Board had taken this position).
Petitioner did not assert any such justification in this case,
however.
/9/ The ALJ found that petitioner's assurances did not change the
temporary status of the replacements (Pet. App. A33), the Board
adopted that finding (id. at A15), and the Board's finding was upheld
by the court of appeals (id. at A11).
/10/ See Conair Corp. v. NLRB, 721 F.2d 1355, 1371-1373 (D.C. Cir.
1983) (a complaint alleging that an employer violated the Act by
threatening to discharge employees could not support a finding that
the employer violated the Act by actually discharging employees),
cert. denied, 467 U.S. 1241 (1984); NLRB v. Pepsi-Cola Bottling Co.,
613 F.2d 267, 272-274 (10th Cir. 1980) (a charge of failing to
reinstate unfair labor practice strikers cannot support a finding of
discrimination in hiring on the basis of union activity, because an
employer's intent is irrelevant with respect to a charged failure to
reinstate unfair labor practice strikers, while anti-union motivation
is an essential element of discriminatory refusal to hire); Boyle's
Famous Corned Beef Co. v. NLRB, 400 F.2d 154, 161-165 (8th Cir. 1967)
(a complaint alleging that an employer had assisted in the formation
of a new union and dominated the new union could not serve as the
basis for a finding that the employer unlawfully refused to bargain
collectively with the union previously recognized as the bargaining
representative).
The remaining court of appeals decisions cited by petitioner are
wholly inapposite. NLRB v. Sunnyland Packing Co., supra, upheld the
Board's finding on an unpled charge that the employer had applied a
"no solicitation" rule in a discriminatory manner,because the court
found that the employer had adequate notice of the allegation and a
fair opportunity to litigate it. 557 F.2d at 1161-1162. Finally,
Clear Pine Mouldings, Inc. v. NLRB, 632 F.2d 721, 728 (9th Cir. 1980),
cert. denied, 451 U.S. 984 (1981), upheld an ALJ's decision to allow
amendment of the complaint and to provide the respondent with six
weeks of preparation time to meet a new allegation. The court did not
rule, as petitioner suggests (Pet. 17), that an amendment and
continuance are always necessary in such circumstances.